When it comes to matters of eminent domain North Carolina government entities aren’t always as accurate as they should be. This was the case with a matter that Cranfill Sumner & Hartzog tried in the Person County Superior Court in February of 2015. The North Carolina Department of Transportation offered just $6,700 for a strip of land in Roxboro. By the time the eminent domain law professionals at Cranfill Sumner & Hartzog had finished with the case, the jury awarded the property owners $157,000.
As with most eminent domain law matters in North Carolina, the story of the NCDOT v. Gillis and C & G Supply Center, Inc. began several years ago. C & G Supply Center, Inc., a building supply company, and the Gillis family were co-owners of a two acre plot of land along Virgilina Road in Roxboro. Since the 1960s, the property owners had operated a 9,500 square foot structure on the land as a building supply store. Because of the nature of the business, two access points and generous parking were required. Tractor-trailers routinely entered and exited the site, and were able to do so safely thanks to the large lot, adequate access and the oversized parking area.
Business took a downturn for the building supply company, causing it to close its doors in 2010. Still, the Gillis family and the corporation retained ownership of the land and the structure. Early in 2012, the NCDOT filed a condemnation lawsuit that would allow them to take a 20 foot wide strip of the land along Virgilina Road. This eminent domain law action would also close one of the access points to the property. The condemnation meant that the business was losing several of its parking spaces.
As with any North Carolina condemnation lawsuit, the DOT had to bring in an appraiser to value the property that was being taken. Usually, this means completion of a full appraisal. At this time, however, the DOT chose to have the appraiser merely complete a less thorough value finding. The NCDOT was using the rationale that the remaining property would not be damaged by the taking. Therefore, a full appraisal was not likely to be needed.
The results of the value finding showed that the NCDOT owed the property owners just five dollars per square foot of land. There would be no compensation for damage to the remaining property. Accordingly, the appraiser suggested that $17,450 was all that was required to justly compensate the property owners. The DOT relied on this value finding when they filed the condemnation lawsuit and deposited $17,450 with the court for the benefit of the property owners. This amount was withdrawn by the Gillis family and the corporation, as is in line with eminent domain law in North Carolina. It’s important to note that they were free to do so without prejudicing their ability to later bring forth a demand that the NCDOT should have paid them more.
Next, the DOT had the property formally appraised by a second appraiser. This time the findings were radically different, with the report stating that the land being taken was only worth one dollar and twenty-five cents per square foot. Moreover, the appraiser estimated that the structure could be built for $64 per square foot and that it was acceptable to depreciate its value by 90%. The DOT also brought in a traffic engineer to bolster their claims that the remaining property would not be damaged. Using computer simulations, the engineer demonstrated that if the building supply company were to begin operations again, its ability to do so would not be hampered by the missing strip of land and the elimination of an access point. With the engineer and the appraiser in agreement, they reached a conclusion that the property owners were owed just $6,700, and not the $17,450 they had received. The property owners now had a choice to make: they could settle for the $17,450 they had received, or risk going to trial and potentially having to pay over $10,000 back to the DOT.
The owners made a wise decision to seek legal advice. With the assistance of the eminent domain practitioners at Cranfill Sumner & Hartzog, they obtained a third, much different appraisal. A structural engineer was hired to review the situation and formulate an opinion. Not only did he find that the building would have cost at least $85 per square foot to replace, but he also concluded that its condition was good and did not warrant 90% depreciation.
Cranfill Sumner & Hartzog also worked with the proper to owners to conduct an on-site experiment. Using traffic cones and a tractor-trailer, they were able to demonstrate that it would be difficult and realistically impossible for large trucks to access the property without swerving dangerously into traffic. An appraiser took all of these findings into account before finally concluding that the remaining property would be damaged by 20% in the taking. In his reasoned opinion, the DOT should pay the property owners a total of $157,000 for the land they were taking and the damage to the remaining property.
A five day trial was needed to settle the matter. Each side presented their findings to the judge and jury. It took a mere 20 minutes for the jury to find for the property owners in the amount of $157,000. Because the DOT must also include interest that is calculated from the date of the taking on these funds, the total the property owners are entitled to is approximately $192,000.
This situation had a positive outcome for the property owners. It was a complex and hard fought case, but the practitioners at Cranfill Sumner & Hartzog had considerable experience on their side. If you are facing an eminent domain issue in North Carolina, contact Cranfill Sumner & Hartzog to schedule a consultation.